Laos appears to have defied its neighbors in a move to press ahead with the proposed Xayaburi Dam on the Mekong Mainstream,
despite concerns raised by neighboring governments and regional civil
society groups. A letter leaked to International Rivers, dated June
8, 2011, reveals that the Lao Government has informed the Xayaburi
project developer Ch. Karnchang that the Mekong River Commission's (MRC)
regional decision-making process is now complete, presumably giving Ch.
Karnchang the green light to proceed with the project.

The MRC
itself, however, is yet to officially announce the regional process as
complete. Previously, at a Special Joint Committee Meeting on April 19, the four member governments agreed to defer the decision on the project to a Ministerial level meeting,
likely to take place in October or November 2011. At this Special Joint
Committee meeting, whilst Laos proposed to proceed with the dam,
Thailand, Cambodia and Vietnam called for an extension to the
decision-making process citing concerns about transboundary impacts and
knowledge gaps requiring further study and consultation. Vietnam also
recommended that the decision on the Xayaburi Dam and other proposed
mainstream dams be deferred for a period of ten years.

The
procedures of the MRC's regional process clearly state in Article 5.4.3
that ‘The MRC [Joint Committee] shall aim to arriving at an agreement on
the proposed use and issue a decision that contains the agreed upon
conditions.' "By deciding unilaterally that the regional decision-making
process is complete, the Government of Laos has committed an egregious
breach of trust and has joined the ranks of rogue nations," said Ms. Ame
Trandem, Mekong Campaigner with International Rivers.

The letter
written by the Director-General of Laos' Ministry of Energy and Mines
to the Xayaburi Power Company Limited refers to a one-month study by
the international consultancy group Pöyry. The letter states that in
Pöyry's view the "Prior Consultation of the Xayaburi Project has now
been completed," and that the Lao government "hereby confirm[s] that any
necessary step in relation to the 1995 Mekong Agreement has been duly
taken."

Conclusion of the PNPCA process is a prerequisite to the
Xayaburi Dam developers signing a Power Purchase Agreement with the
Electricity Generating Authority of Thailand, which the company is now
seeking.

"Laos has no entitlement to unilaterally declare the end
of the PNPCA process at this stage," said Ms. Sor Rattanamanee Polkla, a
Thai Lawyer from the Community Resource Center and member of the Mekong
Legal Network. "Chapter 2 of the 1995 Mekong Agreement makes it clear
that the regional decision-making process is 'neither a right to veto
the use nor unilateral right to use water by any riparian without taking
into account other riparians' rights'. The three other lower Mekong
countries asked for the project to be delayed for further study,
including a trans-boundary Environmental Impact Assessment. Laos has an
obligation under international law to both conduct such an EIA and
negotiate in good faith under the Mekong Agreement before moving
forward."

On April 23, at a meeting in Phnom Penh, the Prime
Ministers of Vietnam and Cambodia jointly expressed concern about the
Xayaburi Dam's transboundary impacts to fisheries and agriculture.
Subsequently, at the 18th ASEAN summit in Jakarta on 7 May 2011, the Lao
Prime Minister agreed to a request by Vietnam's Prime Minister to
temporarily suspend the Xayaburi Dam and commission a review of the
project's documents by an international consultancy firm under the
framework of the MRC.

Laos' Ministry of Energy and Mines had
publicly confirmed that the study had been commissioned, yet no further
details of the study nor the role of the MRC in this process was
announced to the public. It now appears that the study was a cursory,
one-month review of the PNPCA process and not a review of the
environmental and social impacts of the project.

"It's no
surprise that the Pöyry Group was selected to review the Xayaburi Dam
given their long history of dodgy deals that have allowed disastrous
dams to proceed in the Mekong region," said Pianporn Deetes, Thailand
Campaign Coordinator for International Rivers. "But it's outrageous that
Laos would stoop so low as to place its consultants' opinions above its
neighbors concerns. The extensive scientific evidence that demonstrates
the dam's severe social and environmental impacts should no longer be
ignored, and the Xayaburi Dam should be cancelled."